Answer: The problem of this plan is that their income will not be able to break even, because their cost price will be grater than the selling price. Which may cause the new company to wind up
Explanation: break even is a point where the cost price is equal to the selling price. This means that profit nor loss were not made.
Because Avis and Hertz are offering rentals at a prices below average variable cost, the company may not be able to meet up with capital for production of more cars, and this will cause them to wind up.
For a new company, it is always advisable to keep it's selling price a little bit above or the same with it's cost Price, because the strength not any business is the ability to produce more to fill the space of scarcity.
Answer: debit to Dividends Payable.
Explanation:
When the dividend was declared in July 15, the dividend amount was debited to the Retained earnings to show that it was being taken from Retained earnings. It was then credited to Dividends payable to show that the company owed dividends to its shareholders.
On August 15, this liability will be paid off when the dividends are paid and so the Dividends Payable account will be debited to reflect this.
Answer:
$215,000.
Explanation:
An inventory report is a summary of items belonging to a business, industry, or organization. The physical inventory must be done in all of the locations where the firm has stocks.
If the company send inventory to a retailer as consignment, invoicing doesn’t occur until that retailer has sold said inventory. While the inventory is in the retailer’s store, the company still own it and that needs to be reflected on your Balance Sheet.
In this case, the correct amount of inventory that Railway should report is:
$180,000 of physical inventory worth + $35,000 Rogers Consignment store currently goods worth = $215,000 inventory that Railway should report.
